Advertisers Cheer Sudden Flurry of Anti-Spam Suits

Marketers last week applauded the first major assault against purveyors of weight-loss supplements, get-rich-quick schemes and other unwanted offers under the 3-month-old federal anti-spam law, saying it will help ensure the continued growth of the legitimate e-mail marketing industry.

"There are billions of dollars riding on how this comes out, because there are already billions of dollars of legitimate sales in the marketplace through electronic media," said Dan Jaffe, evp of government relations for the Association of National Advertisers. According to the latest U.S. Census Bureau data, legitimate e-mail marketing represents 12 percent of today's $138 billion in Internet commerce.

"Advertisers have as much if not more interest in cleaning up this area than the consuming public, because we believe we have important, truthful messages," Jaffe added. "The bad information is pushing out the good and the useful."

In attempt to separate the wheat from the chaff, America Online, EarthLink, Microsoft and Yahoo! last Tuesday filed six lawsuits in federal courts in California, Georgia, Virginia and Washington state, charging hundreds of individuals with sending unsolicited bulk e-mail to the plaintiffs' customers. These are the first significant lawsuits to result from the Controlling the Assault of Non-Solicited Pornography and Marketing Act, which took effect Jan. 1. The law calls for damages of up to $250 per spam e-mail, with a cap of $2 million that can be tripled for aggravated violations; for e-mails that use false or deceptive headers, the cap does not apply.

"These are the most notorious, most prolific spammers out there," said Dave Baker, vice president of law and public policy at EarthLink in Atlanta. "We went after big targets."

Yahoo!, for instance, filed a suit against a collective of companies called "the Head Operation" alleging that the defendants sent 94 million unsolicited e-mails to Yahoo! customers in January alone. One of Microsoft's legal complaints against John Does 1-50 contends that the defendants used misleading transmission information and subject lines to disguise their identities when sending messages promoting "super viagra" and weight-loss patches.

Meanwhile, state lawmakers continue to push legislation that would add an extra layer of anti-spam enforcement. In Maryland last week, two Democrats—state Rep. Neil Quinter and state Sen. Robert Garagiola—introduced the Spam Control Act. The bill, designed to crack down on fraudulent and deceitful e-mail activity, closely resembles a 7-month-old Virginia statute and Ohio legislation proposed last month. While the federal law pre-empted most state anti-spam laws, it still permits those addressing falsity or deception.

"The resources at the federal level are limited," said Garagiola. "What this does is it gives a tool to the states and state attorneys general to go after the most egregious spammers. We're putting more cops on the street, so to speak."

Under the Maryland bill, violators could face up to three years in prison or up to a $5,000 fine—or, for larger violations, up to five years in prison or up to a $10,000 fine. Garagiola said he hopes the bill will pass by the time the state general assembly adjourns on April 12.

E-mail and Internet-service providers are also trying to stem the problem through technological means, with spam filters and programs that help identify the origin of unsolicited e-mail. They are also looking at ways to "change the economics of spam in order to shift the cost back to the spammer," said Microsoft senior corporate attorney Tim Cranton. One idea under consideration is electronic postage.

Al DiGuido, CEO at Bigfoot Interactive, a New York-based permission-based e-mail communications firm that works with marketers such as Honda, Domino's and MCI, called the various legal and technological advances "a step in the right direction. But unless there's a financial barrier that requires a marketer to identify themselves, authenticate themselves, go through a credit screening and pay a fee in order to gain access, there's not going to be a real end to spam, as far as we're concerned."

Marketers last week applauded the first major assault against purveyors of weight-loss supplements, get-rich-quick schemes and other unwanted offers under the 3-month-old federal anti-spam law, saying it will help ensure the continued growth of the legitimate e-mail marketing industry.

"There are billions of dollars riding on how this comes out, because there are already billions of dollars of legitimate sales in the marketplace through electronic media," said Dan Jaffe, evp of government relations for the Association of National Advertisers. According to the latest U.S. Census Bureau data, legitimate e-mail marketing represents 12 percent of today's $138 billion in Internet commerce.

"Advertisers have as much if not more interest in cleaning up this area than the consuming public, because we believe we have important, truthful messages," Jaffe added. "The bad information is pushing out the good and the useful."

In attempt to separate the wheat from the chaff, America Online, EarthLink, Microsoft and Yahoo! last Tuesday filed six lawsuits in federal courts in California, Georgia, Virginia and Washington state, charging hundreds of individuals with sending unsolicited bulk e-mail to the plaintiffs' customers. These are the first significant lawsuits to result from the Controlling the Assault of Non-Solicited Pornography and Marketing Act, which took effect Jan. 1. The law calls for damages of up to $250 per spam e-mail, with a cap of $2 million that can be tripled for aggravated violations; for e-mails that use false or deceptive headers, the cap does not apply.

"These are the most notorious, most prolific spammers out there," said Dave Baker, vice president of law and public policy at EarthLink in Atlanta. "We went after big targets."

Yahoo!, for instance, filed a suit against a collective of companies called "the Head Operation" alleging that the defendants sent 94 million unsolicited e-mails to Yahoo! customers in January alone. One of Microsoft's legal complaints against John Does 1-50 contends that the defendants used misleading transmission information and subject lines to disguise their identities when sending messages promoting "super viagra" and weight-loss patches.

Meanwhile, state lawmakers continue to push legislation that would add an extra layer of anti-spam enforcement. In Maryland last week, two Democrats—state Rep. Neil Quinter and state Sen. Robert Garagiola—introduced the Spam Control Act. The bill, designed to crack down on fraudulent and deceitful e-mail activity, closely resembles a 7-month-old Virginia statute and Ohio legislation proposed last month. While the federal law pre-empted most state anti-spam laws, it still permits those addressing falsity or deception.

"The resources at the federal level are limited," said Garagiola. "What this does is it gives a tool to the states and state attorneys general to go after the most egregious spammers. We're putting more cops on the street, so to speak."

Under the Maryland bill, violators could face up to three years in prison or up to a $5,000 fine—or, for larger violations, up to five years in prison or up to a $10,000 fine. Garagiola said he hopes the bill will pass by the time the state general assembly adjourns on April 12.

E-mail and Internet-service providers are also trying to stem the problem through technological means, with spam filters and programs that help identify the origin of unsolicited e-mail. They are also looking at ways to "change the economics of spam in order to shift the cost back to the spammer," said Microsoft senior corporate attorney Tim Cranton. One idea under consideration is electronic postage.

Al DiGuido, CEO at Bigfoot Interactive, a New York-based permission-based e-mail communications firm that works with marketers such as Honda, Domino's and MCI, called the various legal and technological advances "a step in the right direction. But unless there's a financial barrier that requires a marketer to identify themselves, authenticate themselves, go through a credit screening and pay a fee in order to gain access, there's not going to be a real end to spam, as far as we're concerned."